Owning a rental in Denver can be a great investment. However, it is important to understand the rules that come along with owning a rental asset. Below is a full breakdown for you. Whether you're buying your first rental, or renting out your current home, here's what you need to know before you sign a lease.
Thinking about an Airbnb or Vrbo instead? Click here for my guide to short-term rentals in Denver.
Denver Rental License: Who Needs One
If you rent out a home in Denver for 30 days or more at a time, you need a Residential Rental Property License from the city. This applies to single-family homes, condos, townhomes, duplexes and other multiplexes, apartments, ADUs, and mobile and manufactured homes.
"Renting" is broader than you might think. If your tenant pays rent, or helps cover any part of your mortgage, property taxes, or HOA dues, that counts, even if the tenant is a family member.
A few things to know about the license:
- It's good for four years.
- It doesn't transfer to a new owner. If you buy a rental, you'll need your own inspection and license before you can legally rent it, so build that into your plan from day one.
- Apply to renew 90 days before it expires. Late renewals come with penalties, and after 90 days past expiration you'll need to apply for a brand-new license.
Residential Rental Property License | Renewal FAQ
Denver Rental Inspection Checklist
To get a license, your property has to pass an inspection by a qualified third-party inspector using the city's checklist. It's a health and safety inspection, not a full home inspection, and cosmetic issues won't fail you. Here's what to pay attention to:
- Smoke detectors: Inside each bedroom, outside each bedroom, and on every level, including the basement. Detectors must be less than 10 years old, and battery-powered ones need 10-year lithium batteries.
- Carbon monoxide detectors: Every unit needs at least one.
- Fire extinguisher: Single-family homes need at least one, within 30 feet of the stove, with an up-to-date tag. Multifamily properties have stricter rules.
- GFCI outlets: At least one in every bathroom, no matter how old the home is.
- Electrical: No exposed or makeshift wiring, and no extension cords running between rooms, across doorways, or tacked to walls.
- Heat and hot water: A working permanent heat source (space heaters don't count) and hot water that reaches at least 110 degrees.
- Water heater: Needs a pressure/temperature relief valve, and gas water heaters can't be in a bathroom or bedroom.
- Exits: Every unit needs a clear path out to ground level. Older homes are judged by the code they were built under, so a home built in 1890 doesn't need to meet today's egress standards.
- Lead paint: In homes built before 1979, peeling paint over a certain size will be tested, and lead has to be fixed by a certified professional.
- Basement units: Must be free of leaks and dampness, and a fuel-fired furnace room needs proper fire separation from living space.
- Structure, pests, and trash: Foundations, decks, and porches in good shape, no infestations, and no trash buildup.
Timing matters. You have 90 days after your inspection to apply for your license, or you'll need a new inspection. If you fail, you can still apply within those 90 days and then have one year to pass a reinspection, which only covers the items that failed. Some repairs, like electrical, plumbing, roofing, or structural work, may need a permit and a licensed contractor.
Inspection Checklist Guidebook (October 2025) | Inspector information
My Note: Most decently maintained homes are already going to contain all of the above. One of the most common reasons landlords fail is they don't have a fire extinguisher, which can be quickly fixed. Additionally, if you are buying a rental property, every one of these items is going to come up on an inspection, and we can have that addressed quickly. If you are buying a decently maintained home, all of the above items are quick fixes for an electrician or plumber.
Colorado Landlord-Tenant Laws Have Changed Too
Beyond Denver's rules, Colorado has passed several landlord-tenant laws you should know:
- For-cause evictions: Since 2024, most landlords need a valid reason to evict a tenant or to not renew a lease.
- Security deposits: As of January 2026, deposits are capped at one month's rent, tenants can pay in installments, and deposits must be returned within 30 days (or up to 60 if your lease says so).
- Income requirements: You can ask for proof of income, but you can't require income above two times the monthly rent.
- Radon disclosure: Before a tenant signs a lease, you must give them the state's radon brochure and a written disclosure of anything you know about radon in the home, including past tests, results, and any mitigation system. The tenant signs to acknowledge it. Testing isn't required, but if a professional test shows radon above 4 pCi/L and you don't make a reasonable effort to fix it within 180 days, the tenant may be able to end the lease. As of January 2026, that remedy only applies to leases longer than one year. Colorado radon law (SB23-206)
- Late fees: You can only charge one if it's in the lease and rent is at least seven days late, and it can't exceed $50 or 5% of the past-due rent, whichever is greater.
- Rent increases: There's no cap on how much you can raise rent, but you need to give 60 days' written notice and can only raise it once every 12 months.
- Pets: Pet deposits are capped at $300 and must be fully refundable, and pet rent is capped at 1.5% of monthly rent or $35 a month, whichever is greater.
- Application fees: You must accept a portable tenant screening report from an applicant, and if they provide one, you can't charge an application fee or a fee to use the report.
- Repairs: Once a tenant gives notice of a habitability issue, you have to respond within 24 hours and start repairs within 24 hours for anything affecting life, health, or safety, or within 96 hours for other issues.
- Advertising rent: The full price, including any mandatory fees, has to be shown upfront rather than just the base rent.
What counts as "cause"? Under Colorado's for-cause eviction law, a landlord can evict a tenant or decline to renew their lease for reasons like:
- Not paying rent
- Violating the terms of the lease
- Creating a nuisance or serious disturbance
- Damaging the property
The law also allows "no-fault" evictions, where the tenant didn't do anything wrong, in situations like:
- Demolishing the home or converting it to a non-residential use or a short-term rental
- Substantial repairs or renovations (not cosmetic work like painting)
- You or a family member moving into the home
- Taking the home off the rental market to sell it
No-fault evictions come with longer notice requirements, usually 90 days, and specific rules on how notice is given. The protections generally kick in after a tenant has lived in the home for a year, and some small owner-occupied properties are exempt. If you're ever considering an eviction or non-renewal, talk to a real estate attorney first.
Colorado security deposit law summary
Protect Your Investment With a Solid Lease
With new rules your lease matters more than ever. At a minimum, I highly recommend hiring a property management company to write your lease. It's usually only a couple hundred dollars, and you get access to a lease written by a lawyer and thoroughly vetted to protect your investment and comply with all the rules.
Should You Hire Full Property Management?
If you'd rather not handle tenants, repairs, and rent collection yourself, a property manager can take all of that on. Here's what fees typically look like in Denver:
- Monthly management fee: Usually 8% to 10% of the monthly rent. Some companies now offer a flat monthly fee instead.
- Leasing (tenant placement) fee: Often 75% to 150% of one month's rent. This covers marketing the home, showings, and screening applicants.
- Lease renewal fee: Commonly $200 to $500 when a tenant re-signs.
- Other costs to ask about: Maintenance markups, setup fees, and fees for handling evictions.
Always ask for a full fee schedule before you sign, and compare a few companies.
Please reach out! I have great rental managers who can take care of you.
Let's Talk
Rules like these can feel overwhelming, but they don't have to be. My goal is for every client to walk away with real clarity: what the rules are, what your property needs, and what your options look like. You make the decisions, and I make sure you have what you need to make them well.
Whether you're buying a rental in University Hills, Virginia Village, or anywhere in the Denver metro, I'm happy to pull rental comps for any property you're considering, so you know what it can realistically rent for.
Thinking about buying a rental? Reach out at 949-689-3554 or arianna.morris@TheAgencyRE.com.
Frequently Asked Questions
Do I need a rental license in Denver?
Yes. Any home rented for 30 days or more at a time needs a Residential Rental Property License, including single-family homes, condos, and ADUs.
How long is a Denver rental license good for?
Four years. It doesn't transfer when a home sells, so a new owner needs their own inspection and license.
What does a Denver rental inspection check?
Smoke and carbon monoxide detectors, a fire extinguisher, GFCI outlets in bathrooms, safe wiring, working heat and hot water, clear exits, lead paint in pre-1979 homes, and leaks in basement units.
Can a Colorado landlord end a lease without a reason?
Usually not. Once a tenant has lived in the home for a year, you need a valid cause or a qualifying no-fault reason, with proper notice.
How much can I charge for a security deposit in Colorado?
As of January 2026, no more than one month's rent, and tenants can pay it in installments.
Do I have to test my rental for radon?
No, but you must give tenants the state's radon brochure and disclose anything you know about radon in the home before they sign.
This post is for general information only and isn't legal advice. Rules change, so always confirm current requirements with the City of Denver or a real estate attorney.